S'pore gets boost from developed economies

The recovery in the developed economies is pulling Singapore's economy along in its wake and setting up the country for a year or two of "modest growth" at least.

The recovery in the developed economies is pulling Singapore's economy along in its wake and setting up the country for a year or two of "modest growth" at least.

The prognosis came from the Monetary Authority of Singapore (MAS) on Tuesday, which tipped full-year expansion of 2.5 per cent to 3.5 per cent this year and much the same for next year.

The rest of the region might not be so lucky but Singapore has a trump card - its close alignment with the big three, the United States, Japan and the European Union.

The MAS noted in its biannual macroeconomic review that the country will benefit from "the positive effects of a recovery in the developed countries", which are likely to outweigh emerging Asia's "current sluggishness".

Singapore's exports are more closely linked to developed economies than to its immediate neighbours, MAS added. It said the recovery in advanced economies seems to be on a surer footing, while emerging Asia must adjust to a rise in global interest rates.

That turnaround should lead to rising demand, reviving the global information technology sector and giving a lift to the local electronics industry, which saw a surprise 20 per cent surge last month over the same period last year.

It added that the recovery in developed economies would boost Singapore's finance services like stock broking and forex trading.

But it cautioned that there could still be volatile patches from time to time, until world recovery is more even and sustainable.